EACA submits comment on Digital Taxation proposals

15 May 2018 – EACA submitted comments on the Commission’s proposals related to the “fair taxation of the digital economy” (COM (2018) 147, COM (2018) 148).

Agencies are incorporated or have a physical presence in the EU; their services are subject to national tax. The Commission’s primary objective seems to be to fairly and efficiently tax “digital activities” of companies without a physical presence, but who have large audiences in those countries. Agencies are concerned that under the Commission’s proposals, agencies would be taxed multiple times for providing one and the same service to their clients (e.g. buying ad space on behalf of their clients), or for services that they do not provide (e.g. the placement of an ad). Both agencies and advertisers would suffer from an increase of media prices, as platforms are likely to pass on the additional taxation costs to them. Offsetting the current tax system would create an uneven level playing field of entities with a physical presence in the EU and those that have a ‘digital presence’, while threatening to double tax the entities that might fall into both categories. Also, in view of the GDPR applying only in a few days, the Commission’s proposals threaten to substantially intrude into users’ privacy in order to determine the place of taxation. More information and EACA’s complete comment can be found here.